A federal appeals court says that a rock archive once labeled one of the greatest “ever assembled” violated publishers’ copyrights by streaming concert footage on the internet – but that it owes a whopping $29 million less in damages than the music companies wanted.
Upholding a decision by a lower judge, the U.S. Court of Appeals for the Second Circuit ruled Thursday that Wolfgang’s clearly infringed the copyrights to nearly 150 songs by making the decades-old footage available online for avid rock fans.
But crucially, the court also upheld a jury’s verdict that the publishers were entitled to just $189,000 in damages – a figure that was nearly the minimum amount allowed by law, and vastly less than the $30 million the publishers had demanded.
On appeal, the publishers had argued that the verdict was “rushed and ill-considered” because it came in March 2020, as the COVID-19 pandemic was looming over New York City and the jurors. But in Thursday’s decision, the Second Circuit ruled that the publishers were stuck with the smaller damages award.
“The publishers failed to persuasively draw any connection between the potential impact of the COVID pandemic and the specific damages awarded,” the court wrote, “or explain why it would have been easier for a rushed jury to award damages on the lower side of the scale, as opposed to in the middle or on the higher end.”
Worse yet for the music companies, the appeals court actually overturned a separate ruling that required Wolfgang’s to cover the $2.5 million they spent in legal expenses bringing the lawsuit. The court also overturned a ruling that held Wolfgang’s owner Bill Sagan personally liable for the damages.
Once labeled by the Wall Street Journal as “what may be the most important collection of rock memorabilia and recordings ever assembled,” Wolfgang’s allows users to stream audio and video from concerts by The Rolling Stones, The Who, the Grateful Dead and hundreds of others. The service was created by acquiring the archives of classic concert promoters, including the legendary Bill Graham.
Unsurprisingly, Wolfgang’s has faced copyright litigation for years. The company was sued in the 2000s by The Doors, Carlos Santana and many other recording artists, eventually resulting in a confidential settlement with all three major labels to cover sound recording copyrights. Another case, a proposed class action by artists whose music appeared on the service, only recently wrapped up in January.
The current case was filed in 2015 by a slew of publishers, including big indies like ABKCO and peermusic and units of Warner Music Group and Sony Music Entertainment. They claimed that Wolfgang’s had infringed the copyrights to the underlying compositions for 197 different songs by streaming recordings of them being performed in concert.
In 2018, the judge overseeing the case sided with publishers and ruled that Wolfgang’s had indeed infringed the copyrights to most of the songs. But he refused to issue an injunction and left the issue of damages for a jury to decide at a trial.
That trial began in March 2020 in a Manhattan federal courthouse, just days before New York City became the U.S. epicenter of the COVID-19 pandemic. The U.S. Copyright Act allowed jurors to award as much as $150,000 in damages for nearly every song infringed, but after nine days of trial and just an hour of deliberations, they awarded only $1,000 each for 167 songs and $750 each for 30 others.
Shocked by an award far below what they expected, the publishers argued on appeal that the trial had been rendered “fundamentally unfair,” saying the jury had been “unable to deliberate as the COVID-19 pandemic was worsening in New York City.” Among other things, they cited a statement by one juror who said the jury members had been “exposing” themselves for weeks and that a lawsuit about “money” and streaming “doesn’t seem all that important compared to lives at stake.”
But in Thursday’s decision, the Second Circuit said the coronavirus concerns voiced by the juror were not evidence that they had ultimately shirked their duty: “Those concerns revealed only an uneasiness to proceed in the face of the pandemic, not an unwillingness to engage in fair and thorough deliberations. Juror Five made this plain: ‘I’m not trying to get a hung jury. I want to do my job. I want to do my duty. So does everyone in this room, and we plan on doing it fairly.'”
Beyond affirming the smaller damages verdict and overturning the award of legal fees, other aspects of the ruling also broke in Wolfgang’s favor.
Though the court upheld the ruling that 147 songs had been infringed when the site posted audiovisual clips, it overturned a decision that 51 additional songs – featured on Wolfgang’s via audio-only content – were similarly illegal. The court said Wolfgang’s might potentially be eligible for a so-called compulsory license for those songs.
The Second Circuit also upheld the lower judge’s decision to deny an injunction that would legally bar Wolfgang’s from continuing to stream the footage, ruling that “the public has an interest in accessing ‘iconic’ recordings of historical importance.”
In a statement to Billboard, Wolfgang’s attorney Michael Elkin said he and his clients were “pleased” with the ruling, stressing that the jury’s smaller award had been upheld as proper and that the request for an injunction had been denied.
“Both the district court and the Second Circuit have now recognized that the recordings at issue serve a valuable function in the public interest, “ said Elkin, who hails from the law firm Winston & Strawn. “We look forward to the next steps in the process.”
An attorney for the publishers did not immediately return a request for comment on Friday.